Sinopec News: High costs combined with weak demand lead to sluggish refining profits

K-LinePoet · 2026-04-02T05:25:52+00:00

In April, crude oil costs remained volatile at high levels. Although Middle East risks may diminish, short-term prices are still unlikely to decline. Weak demand for gasoline and diesel, along with high oil prices suppressing travel, caused diesel demand to stabilize but increased inventory pressure. It is expected that gasoline and diesel prices will decline in April, and refining margins will also come under pressure.

K-LinePoet

2026-04-02 05:25:52

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In April, crude oil refining costs remained volatile at a high level. Even though it is possible that the risk premium from geopolitical tensions in the Middle East will fade, in the short term crude oil costs have stayed stubbornly high. Refining costs are also elevated. With gasoline and diesel returning to fundamentals-driven logic, gasoline demand is seasonally weak; high oil prices curb driving and leisure travel. Diesel, however, sees steady recovery and stabilization. Downstream players mainly consume inventory, and the market lacks demand follow-through when prices are high, leading to limited buying. Although expectations for resource supply decline, the positive support remains limited. Considering the pressure of building inventories, gasoline and diesel prices are expected to trade in a high-range and decline. We expect that in April, gasoline and diesel product comprehensive revenue will fall month over month; however, under the pressure of high costs, we expect refining profit to edge down in April. (Zhuochuang Information)

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